Data related to payments to be stored only in India

Mumbai: The Reserve Bank of India (RBI) on Wednesday said all data related to payments must be stored only in India and data processed abroad will have to be brought back to the country within 24 hours. This means that foreign payment firms such as Mastercard and Visa can process transactions made in India outside the country but the related data should be brought back for local storage within 24 hours.

The clarification given by the central bank removes all ambiguities and brings all Indian and International payment providers on an equal playing field, said experts.

"The entire payment data shall be stored in systems located only in India...," the RBI said in its FAQs containing clarification on data storage locally in India for payment processing.

The RBI stated that there is no bar on processing of payment transactions outside India if so desired by the payment system operators. "However, the data shall be stored only in India after the processing. The complete end-to-end transaction details should be part of the data."

"In case the processing is done abroad, the data should be deleted from the systems abroad and brought back to India not later than the one business day or 24 hours from payment processing, whichever is earlier. The same should be stored only in India," said the RBI.

Any subsequent activity, such as settlement processing after payment processing, if done outside India, shall also be undertaken/ performed on a near real-time basis.

The central bank also clarified that the data can only be shared with the foreign regulators after its approval.

Praveen Dhabhai , Chief Operating Officer, Payworld Money, a Gurugram-based payments processor, said, “The clarification given removes all ambiguities and bring all Indian and International payment providers on equal playing field."

The Frequently Asked Questions issued were to clarify the central bank’s directive in April last year that mandated foreign firms to store their payments data “only in India” for “unfettered supervisory access” but was silent on whether data can be processed abroad or should only be done locally.

“For cross border transaction data, consisting of a foreign component and a domestic component, a copy of the domestic component may also be stored abroad, if required," it said.

On Monday, Commerce and Industry Minister Piyush Goyal had held a meeting with online players, including Amazon, Etsy India, Snapdeal, Paytm, eBay, Makemytrip and Swiggy, to discuss the government's draft e-commerce policy, which centres around data localisation.

The companies put forth their concerns related to RBI data storage requirements and processing related guidelines issued by the RBI. RBI Deputy Governor B.P. Kanungo assured the industry representatives that the Reserve Bank will look into this, a statement by the ministry had said.